Washington state officials admitted to losing a massive amount of taxpayer money meant for workers who lost jobs during the coronavirus pandemic.
Employment Security Department Commissioner Suzi LeVine said Thursday that the state was scammed out of “hundreds of millions of dollars” by an international unemployment scheme, according to The Seattle Times. The commissioner added that the state was attempting to retrieve as much of the stolen money as possible.
“We do have definitive proof that the countermeasures we have put in place are working,” LeVine said. “We have successfully prevented hundreds of millions of additional dollars from going out to these criminals and prevented thousands of fraudulent claims from being filed.”
Washington reported a surge of unemployment claims for the week ending on May 16. The total filings for the week jumped nearly 27% in the state over the week before as unemployment claims nationally have continued to trend downward. Washington now has the highest number of reported unemployed workers as a percentage of its population, according to the Tax Foundation.
Federal authorities said on Saturday that an international group of fraudsters was targeting the U.S. unemployment system trying to syphon taxpayer dollars meant for jobless Americans. The U.S. Secret Service told The New York Times that investigators were trying to track down the syndicate.
”We are actively running down every lead we are getting,” said Roy Dotson, a Secret Service special agent who specializes in financial crimes. While no definitive conclusions have been made, agents suspect the scheme is being run out of Nigeria.
Besides Washington, the states of Florida, Massachusetts, North Carolina, Oklahoma, Rhode Island and Wyoming are also suspected targets of the scheme.
The pandemic has created an opportunity for fraudsters to take advantage of states that are buried underneath hundreds of thousands of unemployment filings because of pandemic-induced shutdowns. The wave of unemployment filings — up to nearly 39 million by the end of last week — have hit state labor departments and caused long delays and crashed outdated processing systems.
Officials are rushing to approve unemployment claims as the unemployment rate continues to rocket well into the double-digits and may hit a levels not seen since the Great Depression.
“There’s a dire need to get money out quickly,” LeVine told the Times. “This makes us an attractive target for fraudsters.”
Congress boosted unemployment checks by $600 a week in March, aiming to combat rampant job loss and float people through the pandemic until states began to reopen again, providing a chance for employment. Most states are now moving slowly toward reopening, but thousands of businesses are now permanently closed after roughly two months of mandated government shutdowns, and experts forecast that the economic damage done since mid-March will take years to recover from.
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